U.S. set to block Hong Kong’s HKT from U.S. networks
People pass by the PCCW sign in Hong Kong.
Mike Clarke | AFP | Getty Images
Regulators in the United States have moved to block one of Hong Kong’s largest telecommunications companies from accessing local networks, citing national security concerns.
US Federal Communications Commission announced On Wednesday, it announced the potential initiation of banning proceedings HKT Trust and HKT Ltd and blocks its affiliates from connecting to American networks, raising concerns about its ties to China.
The government agency asked HKT, a subsidiary of the information and communications technology giant PCCWTo justify why their powers should not be revoked. HKT’s current blocking allows direct exchange of calls and data with US carriers.
China Unicomapproximately owner 18.4% of PCCWIt lost its own US network access in 2022 due to similar concerns.
“The FCC’s action regarding HKT today is an appropriate step toward ensuring the security and integrity of our communications networks,” FCC Chairman Brendan Carr said in a statement. he said.
“The FCC will continue to protect America’s networks from infiltration by foreign adversaries like China.“
HKT’s Hong Kong-listed shares fell more than 5%. PCCW It fell 3.6% in Thursday’s trading.
Share price of HKT and PCCW
According to the annual reports for 2024; HKT And PCCW Although detailed information about specific countries is not provided, they generated approximately 13% of their 2024 revenues from regions outside China and Singapore. HKT accounted for approximately 90% of the group’s total revenue.
Neither PCCW nor HKT immediately responded to CNBC’s requests for comment.
Under Carr’s leadership, the FCC has expanded efforts to exclude China’s government-linked entities, including China Telecom, Pacific Networks and ComNet, from U.S. markets.
FCC on Friday announced Major US online retail websites have removed millions of listings for banned Chinese electronics as part of a broader crackdown on China, it said.
US-China caught in trade tension
PCCW is majority-owned by Hong Kong businessman Richard Li, son of billionaire Li Ka-shing, who has increasingly found his businesses caught in the crossfire of US-China trade tensions.
FWD GroupThe company, owned by Li’s Pacific Century Group, has recently faced hurdles in expanding into mainland China due to backlash from Chinese regulators. Bloomberg reported in July.
Beijing in March reportedly CK Hutchison has ordered state-owned firms to halt new deals with businesses linked to Li Ka-shing and his family after agreeing to transfer stakes in more than 40 global ports, including two in Panama, to a consortium led by BlackRock.
Port deal stalled after Beijing objects to exclusion of Chinese investors, CK Hutchison says I don’t make plans anymore The transaction is planned to be completed in 2025.
The FCC’s latest move against HKT also comes at a time when US President Donald Trump is escalating his trade war with China.
